Over the past few years, the Bank of Thailand (BOT), Ministry of Finance and other relevant agencies have gradually introduced notifications and/or regulations to supervise various types of retail loans. Their attempts are intended to set clear scopes and conditions for related businesses, as well as protecting consumers and offering alternatives for them to gain access to loans. On January 30, 2019, Notification of the Ministry of Finance on business that requires a permit according to Section 5 of the Declaration of the Revolutionary Council No. 58 (Retail Loans under the Supervision) (No.3) was posted on the website of the Royal Thai Government Gazette. As a result, any operator that offers lending using the car registration book as collateral will require a permit under the BOT's supervision.
We at KResearch view that the action undertaken by the Ministry of Finance and the BOT reflects the government's need to supervise this type of lending service, which is currently offered by over 1,000 operators nationwide, with a combined credit amount of more than THB200 billion. Aside from ensuring fairness to consumers, the measure above will be one of the mechanisms helping strengthen the supervisory process of the auto lending business, (including auto hire-purchase for which the car ownership belongs to a leasing company and auto lending using car registration book as collateral for which the borrower still owns and uses the car.)